tag:blogger.com,1999:blog-8305505968390768234.post8918250600228127227..comments2023-08-10T11:39:24.714-04:00Comments on fdralloveragain: What if Dollars Were Replaced by Strawberries?fdralloveragainhttp://www.blogger.com/profile/03488923148019117760noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8305505968390768234.post-15139984166003442092009-10-08T02:54:38.576-04:002009-10-08T02:54:38.576-04:00looking at http://bit.ly/V0QLc, it doesn't loo...looking at http://bit.ly/V0QLc, it doesn't look like "Fed rate lower than 3M T = Fed watering crops" situation has happened all that often since 1989, even during inflationary periods. how does this fit with your theory?thevisiblehandhttps://www.blogger.com/profile/04018067314843447018noreply@blogger.comtag:blogger.com,1999:blog-8305505968390768234.post-25419190591106496612009-01-05T22:21:00.000-05:002009-01-05T22:21:00.000-05:00Back when I wrote this, the Fed discount rate was ...Back when I wrote this, the Fed discount rate was about 500% the 3 Month US Treasury rate, so I used that as an example. <BR/><BR/>The 3M Treasury is the benchmark for the maximum inflationary Fed rate. The Fed rate and the 3 Month treasury rate traditionally overlap near exactly (Fed rate slightly lower to inflate/bait, Fed rate slight higher to deflate/confiscate). <BR/><BR/>The reason the two rates historically correspond is that the Fed lends for 60 days or less, and there will be little borrowing above the market-driven rate at which borrowers opt to protect capital. <BR/><BR/>The Fed knows that banks will be unable to substantially lend at a markup above the 3 Moth treasury rate, but they defend their high rate whenever they wish to cause deflation (when they want to seize assets).<BR/><BR/>Think of the Fed rate as a tool to water or harvest the "Money-crop" from the masses:<BR/><BR/>Fed rate lower than 3M T = Fed watering crops<BR/>Fed rate higher than 3M T = Fed harvesting crops<BR/><BR/>In general, you want to buy stocks/real estate/assets when the Fed is in watering mode, i.e. their stance is inflationary, which puts the wind at your back instead of in your face. When they are above the 3M T, you want to stockpile cash, as asset prices fall around you.<BR/><BR/>It would be nice if we could invest rationally, instead of striving to be in sync with a commercial banking cartel's stranglehold over our currency supply, right?fdralloveragainhttps://www.blogger.com/profile/03488923148019117760noreply@blogger.comtag:blogger.com,1999:blog-8305505968390768234.post-34269023017146402892009-01-05T19:22:00.000-05:002009-01-05T19:22:00.000-05:00The 500% interest rate to which you refer, where d...The 500% interest rate to which you refer, where did you get that? And, can you explain briefly the mechanisams in action driving that number?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8305505968390768234.post-87255506438933636092009-01-05T16:51:00.000-05:002009-01-05T16:51:00.000-05:00this is a wonderful metaphor i like to learnthis is a wonderful metaphor i like to learnAnonymousnoreply@blogger.com